Monday, November 29, 2010

Mayor Who???

JACKASS OF THE MONTH – Our Jackass of the month for November is a favorite of Rink Rats, Los Angeles Mayor Antonio Villaraigosa: the 41st major of Los Angeles, now in his second term, born Antonio Villar on January 23, 1953. Mayor Villar graduated from UCLA and attended The People’s College of Law an unaccredited law school, he has failed the California Bar Exam four times and is unable to practice law.

In five plus years Tony Villar as mayor has accomplished absolutely nothing. His education, bicycle safety, transportation, film production, tax increase policies have all been disasters. His personal life makes Bill Clinton look like the Dalai Lama. He is an embarrassment to the Hispanic community and the Democratic Party.

Mayor Villar (Villaraigosa) just go away!

THE CASE FOR TARP - The Wall Street bailout program officially ended this month. Herb Allison, who oversaw the program for Treasury, wrote in a HuffPo op-ed: "It was unfair. It was appalling. But it was necessary. We had no other choice. Two years ago, we stood at the brink of an economic catastrophe. Ordinary American families were questioning whether their money was safe in banks. ... And now that the fog of an intense financial panic has lifted, it's clear that the critics and cynics were wrong. TARP has proven remarkably successful at stabilizing the economy and laying the foundation for future growth. ... The question, then, is why does TARP remain unpopular, despite its success? I believe, in great part, it's because a number of myths about the program stubbornly persist. Many people think that TARP cost $700 billion. But Treasury is now confident that the lifetime cost to taxpayers will be less than $50 billion."

GENERAL MOTORS IPO WHAT IT MEANS - GM sold about 478 million shares at $33 each, a price higher than the company and its bankers thought was possible just weeks ago. ... Among foreign buyers will be China's largest car maker, SAIC Motor Corp., which ... will buy about $500 million of shares for a GM stake of close to 1% ... The proceeds will help pay back the U.S. government for the $49.5 billion it spent on its controversial rescue of GM ... The government needs GM shares to rise sharply over the coming years for it to be repaid in full. ... With Wednesday's sale, ... the Treasury lost roughly $4.5 billion on GM shares it acquired at an effective cost of $43.84 apiece. ... If GM's underwriters exercise all their options to sell additional shares, GM's IPO at $18.1 billion in common shares would be the second largest U.S. IPO after Visa's $19.7 billion sale in 2008."

The Detroit automaker that was humbled before Congress and the world as it shuttered 11 plants, closed 1,500 dealerships, jettisoned four brands and dismissed tens of thousands of workers, returns to Wall Street.

TREASURY CELEBRATES (FOR NOW) - A senior administration official last night said Treasury would sell as much as 45 percent of its stake in GM for $33 per share, generating up to $13.6 billion and reducing the government' post-IPO ownership to as low as 33 percent: "We view this as a major milestone. We feel good about it. At the time [of the bailout] many critics believed that GM would never come out of this and if it did it would come out wounded." Asked why Treasury wasn't holding onto more shares on the theory that the IPO could have a big "pop" when it starts trading and continue rising higher in the months ahead: "We have said from the beginning that we wanted to exit this investment as soon as practicable."

In total, the offering is expected to raise $23.1 billion for GM. In order to break even on its initial $50 billion investment, Treasury must now sell its remaining shares at an average of around $50 each. Treasury is expected to sell off the remaining stake over the next two years-after a six-month post-IPO break-and will continue to reduce its already limited involvement in the day-to-day operations of GM. Wall Street underwriters, led by JPMorgan Chase and Morgan Stanley, are not exactly making out like bandits on the deal, taking just 0.75 percent of the total value, according to government officials.

The $40.1 billion in repayments would mean the Obama administration has more than recouped its $36.1 billion investment in GM and the federal government would recover all but approximately $9.4 billion of its $49.5 billion overall investment in GM ($13.4 billion of which came under the Bush administration).

BAILOUT RECOVERY NOW AT $250 BILLION - Dow Jones reports: "The U.S. says taxpayers have recovered more than $250 billion from the Wall Street rescue with last week’s delivery of proceeds from the [GM IPO]. The Treasury Department updated its recovery of [TARP] funds with the formal announcement of the delivery of the $11.7 billion in net proceeds from the GM IPO. ... With the GM proceeds, there have been $252 billion in TARP funds returned to taxpayers, Treasury said."

REALITY CHECK - "In richest US county, thousands need handouts" - Leesburg, Va.: "Wendy Latham checked off a wish-list for her family: cereal, diapers for two-year-old Cole, bread, pizza and, in an ideal world, turkey and other fixings for Thanksgiving dinner. ... [S]he is one of hundreds of residents of Loudoun County in Virginia, the richest county in the United States, who have to rely on handouts from a food pantry ... to feed their families. ... The national poverty rate in the United States is 14.3 percent, the highest it's been since 1994."

SAY WHAT: "I think she's very happy in Alaska -- and I hope she'll stay there."
— Barbara Bush, on Sarah Palin

"I think the majority of Americans don't want to put up with the blue bloods. And I say it with all due respect because I love the Bushes."
— Sarah Palin, in response

TOP TALKER - 'NFL's Union Leader Says Lockout 'Near Certainty' Next Season,' by Bloomberg's Curtis Eichelberger: 'The executive director of the National Football League players union said a player lockout next season is a 'near certainty,' and that it would cost the U.S. economy an estimated $5 billion in lost wages, taxes and other revenue if the entire season is canceled. In an interview on 'Political Capital With Al Hunt' airing this weekend on Bloomberg television, union chief DeMaurice Smith said if NFL owners lock out players in order to get concessions in a labor dispute, ... 'The magnitude of the loss would be at the very least about $160 million to $170 million per team-city ... That is a conservative estimate of the economic impact.' NFL spokesman Greg Aiello challenged Smith's numbers, saying they came from union projections rather than a government agency, investment bank or noted economist.'

NOT BAD FOR GOVERNMENT WORK - Speaking of salaries, USA Today's Dennis Cauchon reports that "the number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office"

ECONOMIC STRESS – The top five states for economic stress are: (1) Nevada, (2) California, (3) Florida, (4) Michigan, (5) Arizona. The stress index calculates economic conditions based on unemployment, foreclosure and bankruptcy rates. This index is for September 2010.

MAFFEI IS TOP PAID - WSJ's Joann S. Lublin reports: "Gregory B. Maffei won the executive-pay sweepstakes during a year when his investors also fared well. Mr. Maffei, the leader of Liberty Media Corp., enjoyed total direct pre-tax compensation of $87.1 million last year, four times his 2008 package and enough to land him atop the rankings in The Wall Street Journal's latest CEO pay survey, which includes all 456 of the biggest U.S. public companies. ... Not far behind Mr. Maffei was Larry Ellison, Oracle's billionaire founder. Long ranked among the best-paid CEOs, he received a $68.6 million package that mainly consisted of options valued at $61.9 million."

FORECLOSURE MESS COULD THREATEN BIG BANKS - AP Business Writer Marcy Gordon: "The disarray stemming from flawed foreclosure documents could threaten major banks with billions of dollars in losses, deepen the disruption in the housing market and hurt the government's effort to keep people in their homes, according to a new report from a congressional watchdog. ... If the irregularities are widespread, the consequences could be severe, the Congressional Oversight Panel said."

DANGER, WILL ROBINSON - European officials, increasingly concerned that the Continent's debt crisis will spread, are warning that any new rescue plans may need to cover Portugal as well as Ireland ... The current situation feels eerily similar to what happened months ago in Greece, where the cost of borrowing rose precipitously. ... Of paramount concern to policy makers in Europe is Spain, which is struggling to close its own deficit of 9 percent of G.D.P. at a time when unemployment is more than 20 percent and the economy is failing to grow. Watch for 2011 to be a very bad year also for US if spending does not decrease dramatically.

BOND MARKET DEFIANCE - Mark Gongloff writes: "Bucking the Federal Reserve's efforts to push interest rates lower, investors are selling off U.S. government debt, driving rates in many cases to their highest levels in more than three months. The Fed's $600 billion program to buy Treasury bonds began late last week and is kicking into high gear this week. ... That should have driven prices up on those bonds and lowered their interest rates, or yields, which move opposite to the price. Instead, yields on almost every Treasury have been rising. The trend is a potential problem for the economy and the Fed. Rates had fallen sharply for months in anticipation of a Fed buying program, and in a short time much of that effect has been lost, spelling an unwelcome rise in borrowing costs throughout the economy."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Woody Allen (75), Jeff Bridges (61), Alex Delvecchio (79), Caroline Kennedy (53), Bo Jackson (48), Edwin Meese III (79), Little Richard (78), Vin Scully (83), Lee Trevino (71), Katarina Witt (45).

COLLEGE FOOTBALL PICK OF THE WEEK – Saturday 12/4, it is championship season now in college football. This week the Southwest Conference championship game is a good matchup: #9 Oklahoma Sooners (10-2) vs. #13 Nebraska Cornhuskers (10-2) in Dallas, 8:00 PM ET, ABC. The Sooners are 4 point favorites, we pick The Sooners to cover and win. Is Rich Rodriguez fired yet???
Season to date (11-2).

SMALL COLLEGE PICK OF THE WEEK – Saturday 12/4, the quarterfinals of D-III have the surprising Alfred Saxons (10-2) @ #1 Mount Union Purple Raiders (12-0), Noon ET, CSN. The Cinderella story ends this week, we pick Mount Union over Alfred.
Season to date (9-3).

NFL PICK OF THE WEEK – Thursday 12/2, Houston Oilers (5-6) @ Philadelphia Eagles (7-5), 8:00 PM ET, NFL Network, another sleeper Thursday NFL Network matchup. The Eagles are 7.5 favorites take the points and Philadelphia in this one.
Season to date (4-8).

Top Five Worst NHL Teams at a Quarter through the Season
1). New York Islanders: Mike Bossy could still play on this team at 49.
2). Edmonton Oilers: young talent but a few years away.
3). New Jersey Devils: what happened????
4). Florida Panthers: Paul Gallagher, Murray Cawker (St. Lawrence Alumns) what’s going on?
5). Calgary Flames: overrated and over paid.

SPORTS BLINK: if you are in the area this week the CIF Mid Valley Semifinals pit La Serna Lancers at the Bonita High Bearcats on Friday – the dream season continues for The Bearcats.

Next week, our holiday movie picks.

Until next Monday, Adios.

Claremont, CA
November 29, 2010

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